Thomson Reuters Stock Plunges Amid Broader AI-Related Market Volatility
Thomson Reuters Shares Fall Despite Positive Q1 Results Amid AI Concerns
Thomson Reuters Corp. shares declined despite a strong first-quarter performance, as investors remained cautious about the impact of emerging artificial intelligence (AI) agents on the company's business. The stock initially rallied on Tuesday morning following the release of the earnings report, but reversed course to fall as much as 5.1% after Anthropic PBC unveiled new AI agents designed to handle a broader mix of financial services tasks.
Shares of Thomson Reuters were down 2% to C$127.94 as of 2:21 p.m. in Toronto. The company's main businesses provide databases, software, and other products to legal and accounting professionals. The recent volatility in the stock over the past few months highlights the sensitivity of investors to the risks that AI models may eventually hurt sales and margins.
Thomson Reuters shares fell the most on record on February 3 after Anthropic announced a productivity tool to help automate legal work for companies. This sparked concerns that the company would lose market share to AI-powered newcomers, resulting in shares closing down nearly 16%. However, the stock rebounded when the company's AI tool for lawyers, CoCounsel, was showcased at an Anthropic-hosted briefing.
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Thomson Reuters, which affirmed its full-year revenue guidance on Tuesday, continues to see "broad-based positive signs" in terms of customer retention. The company announced that CoCounsel had reached 1 million users, and an updated, agentic version of CoCounsel is currently in testing, with plans to launch in the third quarter.
Thomson Reuters' Q1 Results
| Metric | Actual | Expected |
|---|---|---|
| Earnings per Share (adjusted) | $1.27 | $1.21 |
| Revenue | $2.09 billion | - |
| Revenue Growth (YoY) | - | - |
The company's first-quarter results exceeded expectations, with earnings per share of $1.27 and revenue of $2.09 billion. This represents a strong performance, with revenue growth outpacing expectations. In an interview, Chief Executive Officer Steve Hasker acknowledged that it may take "a few quarters" for investors to regain faith in the stock, but expressed confidence in the company's products and proposition.
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Thomson Reuters continues to compete with Bloomberg LP, the parent of Bloomberg News, in providing financial data and news.
Investor Takeaway
Investors should be cautious of AI-related market volatility and its potential impact on traditional businesses.
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